Nottingham Centre for Research on
Globalisation and Economic Policy (GEP)

GEP Seminar: Natalie Chen (University of Warwick)

Location
A42 Sir Clive Granger Building
Date(s)
Tuesday 3rd May 2022 (15:00-16:15)
Description

Title: Markups, quality, and trade costs (with Luciana Juvenal)

Abstract:  This paper examines how trade costs induced by geographic distance or bilateral tariffs impact the markups of exports differentiated by quality. It relies on a data set that combines Argentinean firm-level wine exports with experts' wine ratings as a measure of quality. Exporters price discriminate across destinations by raising markups in more distant markets, and by lowering them in high-tariff countries. However, the response of markups to changes in trade costs is heterogeneous and weaker for higher quality exports. These empirical patterns can be predicted by trade models featuring demand functions more convex than log-concave, but less than superconvex. They demonstrate that the variation in firm-level export unit values across markets is not only driven by quality differences but also by markup variation conditional on quality.

 

Nottingham Centre for Research on Globalisation and Economic Policy

Sir Clive Granger Building
University of Nottingham
University Park
Nottingham, NG7 2RD

Enquiries: hilary.hughes@nottingham.ac.uk